Table of Contents
- What Is a Medicare Supplement Plan?
- What Is Open Enrollment for Medicare Supplement?
- When Is Open Enrollment for Medicare Supplement Plans?
- Who Is Eligible to Enroll in a Medicare Supplement Plan?
- Why Should You Buy Medicare Supplement During Open Enrollment?
- What Are Guaranteed Issue Rights?
- Can You Enroll in Medicare Supplement Plans at Any Time?
- What Happens if You Miss Your Medigap Open Enrollment Period?
- What Is the Difference Between Open Enrollment and Annual Enrollment?
- When Is the Best Time to Buy a Medigap Policy?
- Frequently Asked Questions (FAQs)
About 10,000 people turn 65 years old every day in the U.S—a significant birthday signaling eligibility for Medicare[1]. If enrollment in Medicare is on the horizon for you or a loved one, it’s also worth looking into Medicare Supplement insurance, commonly known as Medigap.
Read on to learn more about your health insurance options, including details on Medicare Supplements and information to help you navigate the open enrollment process.
- Choose from ten standardized Medicare supplement plan options
- Compare the benefits offered by each type of plan online
- 1,500 licensed agents, all based in the USA
- Call to speak to a licensed insurance agent to help find the best Medicare plan for your needs
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What Is a Medicare Supplement Plan?
Medicare consists of Part A, which covers hospital, skilled nursing and hospice costs, and Part B, which covers medically necessary services and supplies. Part A and Part B are often referred to as Original Medicare.
A Medicare Supplement (or Medigap) plan is sold by private insurance companies and can help you get the coverage you need to fill the gaps in Original Medicare. Plans are lettered A through N and offer a standardized set of benefits, although each is a little different in what and how much they cover.
In 2015, one in four people with Original Medicare had a Medigap supplemental policy to help cover deductibles, cost-sharing and catastrophic expenses, according to a report from KFF[2].
Indeed, Original Medicare coverage often contains large gaps. For example, nearly six million Medicare beneficiaries are currently facing out-of-pocket costs for COVID-19 treatment, because they had no supplemental coverage like Medigap to help pay for some or all of the cost sharing[3].
Some Medigap policies also cover certain benefits like emergency foreign travel expenses. “Your out-of-pocket costs are much more predictable and easier to budget with a Medigap plan,” says Gretchen Jacobson, Ph.D., vice president of Medicare at the Commonwealth Fund and co-author of the KFF report. “You’re primarily responsible for paying the monthly premium, but that monthly payment can be expensive.”
All but three states (Massachusetts, Minnesota and Wisconsin) have 10 standardized Medigap plans available that offer the same basic benefits, but they vary in how much of your expenses they pick up.
What Is Open Enrollment for Medicare Supplement?
Open enrollment is a designated time period within which a person can enroll in a variety of Medicare coverage options without risking penalty fees, medical underwriting, denial of coverage and more. Each type of Medicare plan has its own open enrollment period in which a person can most easily add a plan to their existing coverage or switch plans.
When Is Open Enrollment for Medicare Supplement Plans?
Your initial Medigap open enrollment period is the best time to buy a Medicare Supplement policy. It’s the six-month period that begins on the first day of the month in which you’re both at least 65 years old and enrolled in Medicare Part B. Some states have additional open enrollment periods, including ones for people under 65.
During this window, insurance companies cannot deny you a Medicare Supplement policy based on your health status or a medical condition, a process known as medical underwriting.
“One of the most important things to know about Medigap plans is that you actually don’t have many opportunities where you’re guaranteed to be issued a policy,” says Jacobson. “Beyond [your initial open enrollment period], your opportunities can be relatively limited depending upon what state you live in.”
The Better Medicare Alliance, an advocacy organization, is leading the charge for solutions to streamline the Medicare enrollment process. In a recent report, they note that many health equity gaps arise because of people not fully understanding their coverage options during the short open enrollment period, calling on Congress to make improvements.
Who Is Eligible to Enroll in a Medicare Supplement Plan?
To be eligible for Medigap, you must first be eligible for Original Medicare and enrolled in Part A (hospital insurance) and Part B (medical insurance).
There are three ways you can become eligible for Medicare:
- You turn 65 years old.
- You have a qualifying disability and receive Social Security Disability Insurance for at least 24 months.
- You have certain illnesses, such as end stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS).
Can You Be Denied a Medicare Supplement Plan?
If you miss your initial Medigap open enrollment period and attempt to enroll in a Medicare Supplement plan at a later date, you could be denied coverage depending on the insurance provider, your age, your health status and where you live. Since medical underwriting laws and regulations vary by state, it’s best to reach out to your local Medicare office for the most up-to-date information regarding Medicare Supplement plans available to you and whether you risk being denied coverage if you miss your initial open enrollment period.
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Why Should You Buy Medicare Supplement During Open Enrollment?
It’s often best to purchase a Medicare Supplement plan during your initial open enrollment period because it’s the only timeframe in which you’re guaranteed coverage without being subject to any medical underwriting or penalty fees. Typically, Medicare beneficiaries have access to the most affordable plan rates during their initial open enrollment period without compromising quality of coverage.
What Are Guaranteed Issue Rights?
Guaranteed issue rights refer to “your rights to buy certain Medigap policies in certain situations outside of your Medigap Open Enrollment Period,” according to the Centers for Medicare and Medicaid Services (CMS).
Special Scenarios Granting Guaranteed Issue Rights
“There are a handful of scenarios that grant these Medigap protections,” says Amanda Baethke, director of corporate development at Aeroflow Healthcare, a durable medical equipment (DME) provider that supplies patients with home healthcare solutions through insurance. She sees these scenarios regularly in her work. “In those situations, insurance companies must sell you a Medigap policy, must cover all your preexisting health conditions and cannot charge you more because of your past or present health problems.”
Such scenarios include the following:
- You joined Medicare Advantage at 65 and decided to switch back to Original Medicare within a year (known as trial rights).
- Your Medicare Advantage plan shuts down or you move out of its service area.
- Your employer plan that supplements Medicare ends.
- Your Medigap plan shuts down.
How Medicare Defines a Preexisting Condition
A preexisting condition is any health issue you may have had—and received documented diagnosis or treatment for—before your new insurance policy is due to start. However, it may still be possible for a condition to be classified as preexisting by Medicare even if it’s undiagnosed or untreated.
Let’s say, for example, you’re about to turn 65 and have diabetes requiring insulin and continuous glucose monitoring. You also have sleep apnea and use a CPAP machine (continuous positive airway pressure) at night. Both would be classified as preexisting conditions by Medicare because you have a documented diagnosis in your medical record and have been receiving ongoing treatment.
Each state regulates the coverage rules for preexisting conditions under Medigap differently. Check with your state’s Medicare office to verify eligibility rules—especially if you’re interested in getting a policy outside of your initial enrollment period.
Coverage Complications for Preexisting Conditions
If none of the situations described above apply to you, then you fall outside the guaranteed issue rights—and could be on the hook for costs associated with your preexisting condition.
“Medigap is one of (if not the last) areas of health care that insurers can underwrite,” says Jacobson. “This means if you’re not in a guaranteed issue period, private insurance companies can charge you higher premiums based on your health status or preexisting condition(s) and whether you smoke.”
Medical underwriters attempt to determine a private insurance company’s level of risk (i.e., how much money they’re likely to lose) by granting you a Medigap policy, and they use your health history when determining whether to accept your application and how much to charge you. An analysis on medical underwriting in the long-term care insurance market, for example, estimates 40% of people in the general population (without considering restrictions based on wealth) would have their long-term care insurance application rejected for medical reasons[4].
To avoid medical underwriting and improve your access to coverage, the best thing you can do is apply for a Medigap policy in the six-month window after you get Medicare Part B.
- Choose from ten standardized Medicare supplement plan options
- Compare the benefits offered by each type of plan online
- 1,500 licensed agents, all based in the USA
- Call to speak to a licensed insurance agent to help find the best Medicare plan for your needs
Can You Enroll in Medicare Supplement Plans at Any Time?
Medicare’s open enrollment period, which runs from October 15 to December 7 annually, allows you to make changes to your health and drug coverage. However, 57% of Medicare enrollees don’t take advantage of the potential money-saving option to compare their Medicare coverage choices, according to data from KFF[5]. Older enrollees are even less likely to review their plan choices, with 66% of those 85 and older not taking advantage of open enrollment at all.
If you’re past the initial open enrollment period and are interested in a Medigap plan, Jacobson provides a warning: “Medigap insurers don’t have to sell you a plan that you want and can charge you higher premiums if they do choose to sell you a plan depending upon where you live, your health status and your age.”
There are also scenarios—such as if you’re already enrolled in Medicaid or have a Medicare Advantage plan—in which it might actually be illegal for an insurance company to sell you a Medigap policy, according to CMS.
Different insurance companies may charge you different premiums for the same exact Medigap policy, CMS also notes, so be sure to shop around and compare policies under the same plan type and focus on what matters most to you and your situation.
What Happens if You Miss Your Medigap Open Enrollment Period?
If you miss your initial open enrollment period, you generally have to wait until the annual Medicare open enrollment period to request coverage. However, if you have a guaranteed issue right as explained above, you can work with a private insurance provider outside your initial open enrollment period to enroll in coverage that suits your needs.
What Is the Difference Between Open Enrollment and Annual Enrollment?
“Open enrollment” and “annual enrollment” are two types of insurance enrollment periods.
Annual enrollment is a term used in relation to employer-sponsored health insurance specifically. It’s the period that often runs from the beginning of November to the middle of December in which an employee can make changes to their existing health insurance coverage. Such changes take effect on January 1 of the subsequent year.
Open enrollment, on the other hand, is a term that applies to everyone who doesn’t have employer-sponsored health insurance, including Medicare beneficiaries. Similar to annual enrollment, open enrollment is a window of eligibility in which people can make changes to their insurance plans. The open enrollment period for Medicare beneficiaries runs from October 15 to December 7 each year.
When Is the Best Time to Buy a Medigap Policy?
The best time to buy a Medigap policy is usually during your initial enrollment period, which is that six-month window in which you’re both at least 65 years old and enrolled in Medicare Part B. It’s only during this enrollment period that you’re protected from penalty fees, medical underwriting and denial of coverage.
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On Medicare Supplement's Website
Frequently Asked Questions (FAQs)
Do I really need supplemental insurance with Medicare?
The degree to which you can benefit from Medicare Supplement insurance depends on your budget, your health status, the medical services you use and how frequently you use them. Generally, Medicare Supplement beneficiaries enjoy the extra layer of financial protection Medicare Supplement plans provide, as they often cover a percentage of copays, coinsurance and deductibles not covered by Original Medicare. Should you experience a health emergency or serious illness, the extra coverage can help minimize out-of-pocket costs associated with receiving the care you need.
How long is open enrollment for Medicare Supplement policies?
Open enrollment for Medicare Supplement spans six months, beginning on the first day of the month in which you’re both at least 65 years old and enrolled in Medicare Part B. Some states have additional open enrollment periods, including ones for people under 65, so check with your local Medicare office for additional enrollment options that may be relevant for you.
What is the deadline for choosing a Medicare Supplement plan?
The initial deadline for choosing a Medicare Supplement plan is the last day of the six-month open enrollment period. If you’re making a change to your coverage during the annual Medicare enrollment period, your deadline for making such changes is December 7.
